Okay gripes about the bailout aside, the injection of money has brought LIBOR rates down and calmed the commercial paper market. The stock market is going down simply because people are selling too late.
This morning Larry Fink CEO of Blackrock made a constructive suggestion, but first let's talk accounting. When a bank making a house loan repossess the house, that becomes a negative against their equity, OE in the A = L + OE goes down as the loan moves out of A. the trick to to arrange things so that does not happen. Fink suggests we have a post WW II like VA program and vigorously lower the interest rates on mortgages like we did for Vets, that makes sense since empty houses help no one. i would further suggest we eliminate
mark to market rules for firms that force marking down financial instruments in the absence of a certain market
letting banks re classify home mortgages as rent property. Frankly if one makes a 30 year loan, there is little to no equity build any time soon anyway. And with the housing market near gone, who are we kidding, the bank will have to rent the house anyway. so why not just reclassify it as a rent property, ie, the bank now owns stand along apartments not houses. that is a better idea than booting people out and classifying the house as a bad loan.
DLE
Professor Elam 
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